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Crypto company Matrixport recently published a report stating that FTX could sell at least $3.4 billion worth of cryptocurrencies to refund its users in fiat currency instead of crypto, which could lead to volatility in the altcoin market for the rest of the year.
Altcoins Under Pressure from VCs, According to Matrixport
Matrixport mentioned that FTX, the cryptocurrency exchange that went bankrupt in November 2022, expressed its intention to sell $200 million worth of cryptocurrencies every week. This means that the bankrupt exchange will continue to sell its reserve cryptocurrencies until the end of 2023.
Furthermore, FTX is not the only major seller in the market. Markus Thielen, the research director of Matrixport, stated, “Crypto venture capital (VC) funds are also under significant pressure to refund their investors,” and added, “These VC funds will likely continue to be major sellers of altcoins and will have to convert their assets into cash.”
Solana (SOL), ApeCoin (APE), and Axie Infinity (AXS) Pose a Threat
Matrixport issued a warning about the first altcoin, Solana (SOL). Although SOL’s price is currently declining amidst the intimidating atmosphere caused by potential FTX sales, it is not the only altcoin under intense selling pressure. Another altcoin heavily held by VC investors is ApeCoin (APE). Moreover, APE has a planned token unlock event scheduled for September 17th. According to Matrixport’s report, the unlock event will release 11% of the circulating supply.
During the planned unlock event on August 17th, the unlock of APE, which accounted for 4.2% of the circulating supply, caused a 24% drop in price. The upcoming unlock event is expected to be even larger, indicating an inevitable decrease in APE’s price.
Furthermore, another significant token unlock event is scheduled for October 20th, where the unlock of AXS, representing 11% of the circulating supply, will take place in Axie Infinity (AXS). According to the report, the previous unlock event on July 22nd resulted in a 32% price drop for AXS. The planned upcoming token unlock event is expected to be followed by a similar price decline.
